13 Jul 2013

Summer is typically moving season in Canada.

People look for new opportunities in the warm summer months when moving to a new city is a breeze. The kids don’t suffer any school disruptions and the weather is typically cooperative.

It can, however, be a terrific expense.

After all, you have to buy boxes (unless you have a friend at the grocery store who can get you them for free) and hire a moving company or rent a drive-it-yourself truck.

Then there’s getting to your new town or city: fuel for the car, meals for everyone and, if you’re going far enough or need to wait for you new place to be ready, nights in a hotel.

Save those receipts

If you’re moving to a new home within Canada for work or to carry on a business, you can deduct eligible moving expenses from the employment or self-employment income at your new digs.

Line 219 on your T-1 tax return covers your moving expenses deduction.

To qualify, your new home must be:

  • At least 40 kilometres closer to your new place of employment or business than your previous home
  • Your primary place of residence (i.e., you have sold or rented your former home)

If you moved to a new home outside Canada, you may still beeligible to deduct moving expenses on your tax return.

Some employers may provide employees with a relocation allowance to cover your expenses. If you receive any type of reimbursement from your employer, you must state the amount you received on your tax return or reduce your moving expenses by the amount provided.

What expenses may I claim?

According to the Canada Revenue Agency, you can claim the following:

  • Transportation and storage costs (packing, hauling, moving, in-transit storage, insurance) for household effects, including such items as boats and trailers
  • Travel expenses, including vehicle costs, meals and accommodation, for you and your family members
  • Temporary living expenses for up to 15 days, including meals and accommodation
  • Cost of cancelling a lease at your old residence, not including any rental payment for the period the residence was occupied
  • Incidental costs, including a change of address on legal documents, replacing driver licences and non-commercial vehicle permits, and utility hookups and disconnections
  • Cost to maintain your former residence, up to $5,000, if it was vacant after you moved and during a period when reasonable efforts were made to sell the home
  • Cost of selling your old residence, including advertising, notary or legal fees, real estate commission, and mortgage penalty when the mortgage is paid off before maturity
  • Cost of purchasing your new residence if you or your spouse or common-law partner sold your old residence as a result of your move

For your mileage, meals and accommodation, you must keep eithera detailed or simplified account of your costs.

Make sure you know what expenses are absolutely not permittedby the CRA


Can you help?

We sure can. We specialize in small-business accounting and financial services. Contact one of our tax specialists and we can help you optimize the tax benefits and credits available to self-employed individuals and small businesses.

Fill out our contact form or give us a call at 403-226-8297.